Debate under way over state’s Medicaid program

Topeka  As Gov. Kathleen Sebelius waits to become U.S. secretary of health and human services, some Kansas officials are debating whether state oversight of its Medicaid program is strong enough.

The debate focuses on the inspector general’s office, created in 2007 within the Kansas Health Policy Authority to ferret out potential problems in Medicaid. The first inspector general left in October and has told legislators the authority hindered her work.

Some legislators worry that the inspector general isn’t independent enough. The Senate Ways and Means Committee plans to vote Thursday on a bill to move the office to the Legislature’s auditing division.

The authority, which was founded in 2005, contends it has managed the inspector general’s office properly but has asked the attorney general for a review.

Joe Tilghman (TILL-man), the chairman of the authority’s board, has questioned whether moving the inspector general’s office will improve oversight.

Sebelius spokeswoman Beth Martino said: “If closer examination is warranted to ensure the Medicaid program is functioning as it should, the governor supports that effort.”

If Sebelius is confirmed by the U.S. Senate to become HHS secretary, she would oversee the Medicaid program nationwide.

The governor hasn’t been a central player in the debate over Kansas’ inspector general. She appoints three of nine voting members of the authority’s board, and four of her Cabinet secretaries are nonvoting members. The board hires the inspector general.

“That’s a substantial difference from HHS, which is a Cabinet agency, with appointment by the president,” said authority spokesman Peter Hancock.

Sen. Laura Kelly, a Topeka Democrat and Sebelius ally, said: “I don’t think we can pull the governor in on this one.”

The scrutiny came after a legislative audit described $13 million in “suspicious claims” paid by Medicaid in 2005 and 2006, before the authority took over the bulk of the program. In one case, auditors said, the program paid a doctor $941 for a Cesarean section when the patient was an 8-year-old boy.

“Somewhere along the way, it got mired and sidetracked,” said Senate Majority Leader Derek Schmidt, an Independence Republican. “We didn’t quite get some of the mechanics of the office right.”

The Health Policy Authority said the audit showed a relatively small amount of unusual Medicaid payments in the past and the issues aren’t systemwide.

The Medicaid audit, released in December, put the Health Policy Authority on the defensive, even though it didn’t take control of most of the state’s $2.4 billion Medicaid program until July 1, 2006. The program is financed by states and the federal government.

In a response, the authority said “suspicious” payments made up less than 1 percent of the claims paid in 2005-06, and it found reasonable explanations for some of them. Auditors said the Cesarean claim was paid because a clerk mistakenly overrode internal controls.

But Schmidt said the audit demonstrated the need for an inspector general. He said the case for moving the office was bolstered by recent testimony before the Senate committee by Robin Kempf, inspector general from September 2007 until October 2008.

Kempf testified that she left the job after the authority attempted to control her access to legal advice; limit her contacts with legislators and the general public, and interfere with her first audit, on Medicaid-covered home health services.

In an interview, she called the problems “rather textbook.”

“The people who are in leadership in KHPA are the founding leaders, really, and have an incredible amount of ownership,” she said. “The concept of auditing is an outsider coming in and telling you what you’re doing wrong.”

The authority hasn’t named a new inspector general because of a hiring freeze within state government. But it has appointed one of Kempf’s three staff auditors to manage the office.

Hancock said the authority couldn’t address much of Kempf’s testimony publicly because it involves personnel issues. The attorney general’s office is working on a legal opinion about the inspector general for the board, and Tilghman said the board will abide by any recommendations made.

Tilghman, a retired, longtime regional administrator for the HHS division that oversees Medicaid, said keeping the inspector general’s office within the Health Policy Authority allows it to develop expertise. And the board sees the inspector general as “an independent actor,” he said.